Warren Buffett's 9 tips for the stock market and 5 phrases for life: what the Oracle of Omaha says

The word of businessman Warren Buffett is one of the most authoritative in the world in terms of finance and investment. His knowledge of world markets led him to be one of the richest men in the world and earned him the nickname Oracle of Omaha.

Every once in a while, the president and CEO of Berkshire Hathaway gives advice on how to invest money. And every time he speaks, his sayings resound for months .

These are some of the keys that Buffett suggests taking into account when managing savings.

1. Reinvest the profits. When making a profit after an investment there is always the temptation to use it immediately. In Buffett's opinion that is a behavior to be avoided. The ideal is to reinvest the profits. This is what he did in his teens when he and a friend invested in a pinball machine. In a short time they managed to multiply the capital and have eight.

2. Avoid unnecessary debts. The need for capital when starting a personal project or a venture leads many to borrow money. Many times, more than what is really necessary. This is how they end up drowning in high interest rates. In case you need financing, you should always look at the rates and ask for the minimum possible . Loans can be addictive and cause problems in the future.

3. Living an austere life. That doesn't mean living without comforts, but minimizing expenses will create more savings and investment opportunities. Buffett, despite owning a large fortune, still lives in the same Omaha house that he bought in 1958 for $31,500.

4. Don't invest in what you don't understand. Knowing how the business works and why it will produce benefits is key when investing. Otherwise, it will not be possible to anticipate a market crash and avoid a catastrophe. If you can't explain the business model, let the opportunity pass you by, no matter how tempting the returns seem.

5. Think long term. The image Buffett uses is clear: a person can enjoy the shade of a tree long after it has been planted. Therefore, if you are not prepared to see your investments plummet overnight, it is best to avoid the Stock Market. The daily ups and downs can bring great joys and great sorrows. However, when it comes to putting money into stocks, what counts is the trend and the long term.

6. Pessimism is a friend and euphoria is the enemy. It is always better to be cautious. By trying to find the risks and dangers of a possible investment, you will avoid headaches. On the other hand, if the emotion of the moment is the guide for the road, the breakdown will come sooner rather than later.

7. "It is not possible to do a good business with a bad person". You have to surround yourself with successful people. In Buffett's own words: "I chose associates with better behavior than you. That way, you end up going in that direction."

8. What works today may be useless tomorrow. In a context as changing as the current one, this recommendation is especially important. It is enough to think that two years ago no one could foresee the collapse that the tourism companies and airlines would have in their values. For this reason, even those that have always been "safe businesses" can cease to be so in a matter of days. You must always be aware of a possible drop in profits.

9. Always be prepared for the worst. It is convenient to have a contingency plan in case of a financial crash. This allows you to get out of unforeseen situations. Just think that in this century there have already been two global shocks, in 2008 and 2020, to realize that no one is exempt from a crisis.

THE 5 BEST PHRASES FOR LIFE

1. Don't forget the business basics."Price is what you pay. Value is what you get."

2. Be smart and realistic. "Try to buy shares in businesses that are so wonderful a fool could run them. Sooner or later one will."

3. Act with honor and integrity. "It takes 20 years to build a good reputation and five minutes to ruin it. If you think about it, you will do things differently."

4. Value what is important. "Too often, a large collection of possessions ends up possessing its owner. The asset I value most, aside from health, is interesting, diverse, and loyal friends."

5. Brake when necessary. "The most important thing to do if you find yourself in a hole is to stop digging."